The International Monetary Fund (IMF) is a global organization that is mandated with the duty to standardize international financial relations and exchange rates. It has a role in overseeing the global economy strengthening its members economically. It was created mainly for three important intentions. First was to enhance monetary exchange stability, to expand and balance the growth of international trade and thirdly to establish a multilateral system of payment for transactions. On the other hand, the Export-Import Bank of the United States (Ex-Im Bank) is an organization that fosters the financing of the U.S. exported goods and services as asserted by Baron (2014). The bank does not compete with local private lenders but serves as a financier in transactions where the commercial lenders are unwilling to accept risks such as political and commercial.
On their impact on global business, the IMF plays a crucial role in advising member countries on economic and financial regulations that help promote business across different countries. The IMF has also set aside an amount of money that member banks can borrow from when they are in a business crisis. According to Boughton and Boughton (2012), The IMF also oversees regulations on exchange policy ensuring that international trade is favorable to all its members. The Ex-Im bank supports many exporters in the U.S. through financing them. It also assists lenders and brokers to venture into the international market. It provides risk protection, capital to companies in the U.S. and also credit services to foreign buyers.
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However, both IMF and Ex-Im banks have been associated with controversy in their years of existence. The IMF has been accused of offering loans that pave the way for the exploitation of natural resources. The policies surrounding the lending and paying back do not take into consideration the environmental accept. The lending conditions have been identified as being too harsh causing problems to poor countries. The Ex-Im bank has been accused of controversy especially on the types of businesses that benefit from the funds. It has been accused of favoring big businesses at the expense of the smaller businesses that could be run by private enterprises.
References
Baron, D. P. (2014). The Export—Import Bank: An Economic Analysis . Academic Press.
Boughton, J. M., & Boughton, J. M. (2012). Tearing Down Walls: The International Monetary Fund, 1990-1999 . Washington, DC: International monetary fund.
